Minister Proposes Budget Cuts Along with an Increase in Wages

Finance Minister Avraham Shohat has announced an economic plan to slash the government budget by over $233 million and to boost the net wages of all Israeli workers.

The plan comes I response to fears that workers would see a decline I their wages as a result of a new health tax that took affect this month.

Shohat said 90 percent of the country’s wage earners would see an increase in their net salaries next month. He said the cuts in the budget would come in part as a result of reduced income taxes for working women. He also said the budget cuts would not affect services to citizens.

Opposition members dismissed the reforms, saying they were not serious.

In other economic news, economic growth in Israel will be slower in 1995 than it was last year, according to an internal document prepared by the research department at the Bank of Israel.

While the economy expanded by 7 percent in 1994, officials at the bank estimate that growth in 1995 will be in the 4.5 to 5 percent range.

Citing the slowdown in overall growth, bank officials also predicted that unemployment would rise in 1995 to 8.2 percent from 7.6 percent in 1994.